Category Archives: Finance

The Pros and Cons of the Point of Consumption Tax for the Gambling Industry

The past decade has brought many changes to the gambling industry, recent technologies and accessibility has allowed for innovation to be made in all areas. There’s also been significant changes to the legal and regulatory side of the industry which has created an influence and a bearing on the practice of many gambling operators in the UK.

The Point of Consumption tax is the latest change in legislature to dramatically effect gambling operators that has been made by the UK Gambling Commission in 2014. The PoC tax otherwise known as the remote gaming duty was introduced by HMRC to combat many primarily UK based operators moving their trade offshore to take advantage of tax breaks.

What does this mean for offshore based gambling operators?

Over the past 10-15 years we’ve seen a notable change in the amount of betting operators who have returned to the UK following their time in places like Malta, the Cayman Islands, or Gibraltar. Gibraltar perhaps is now too strong as a gambling hub to be knocked by the consumption tax but many operators are certainly feeling the effects.

The new regulations mean that a duty of 15% must be paid on all bets made by UK customers irrespective of where the online operator is located. This law means that operators can’t take advantage of the UK market while simultaneously enjoying the financial benefits of being based in other territories.

The law has been met with both distaste and support by different spectrums of the industry. There’s no doubt that it’s the operator whose been hit the hardest but could we see the focus on the UK market swivel to other rising markets in the industry?

Emerging online markets

New economies around the world are starting to emerge and with these new advances comes market openings in places that wouldn’t normally be associated with online slots & gambling. In recent years Scandinavia has become a huge market for operators with destinations like Latin America, North America, and Asia opening up new opportunities that deflect the blows of the Point of Consumption tax for operators who once thought of the UK as the be all and end all of their business opportunity.

We’re certainly witnessing the trend of operators moving operations back to the UK but many are planning to ride out the storm for the time-being. Leading gambling operators like Bet Victor owned by Victor Chandler are proud of the empire they’ve built in Gibraltar and plan to stay loyal to what they’ve created.

Scott Manford, CEO of Easy Slots said: “At Easy Slots we value the country we operate in but do understand why some operators have a distaste towards the Point of Consumption tax. In addition we feel like as a company based in the UK we are hit with a double-edged sword that is the PoC and corporation tax. Furthermore, it’s the more recent Point of consumption tax 2 as it’s informally known that really has set the cat among the pigeons.”

Point of Consumption Tax 2

In recent months there’s also been new adaptations to the Point of Consumption tax that have further upset gambling operators. Then UK Chancellor George Osbourne announced that any operators who were licensed in the UK must be required to pay a tax on the ‘free bets’ they administer.

The laws came into effect on August 1, 2017 with operators required to pay 15% general duty on all free or discounted bets regardless if they are used by the player or not. The additional consumption tax has come under fire from all areas of the industry. It’s argued the many ethically positive online betting operators are being unfairly punished when there are much more pressing matters going on in the industry such as addiction and the moral ambiguity that has recently been in the news regarding fixed odds betting terminals.

Only time will tell on how long this legislature will remain within the industry, but for as long as it’s benefitting the UK economy, the light has seemingly went out at the end of the tunnel.

A Ten Point Checklist to Startup Funding in 2017

Image result for startup

There are many avenues of capital available when starting a business such as a loan from https://oinkmoney.com/, but regardless of the route we take, we need to ensure that we have our financial affairs in order when it comes to our startup. Evidently, there can be a lot to remember, which is why it can be helpful to use a checklist.

  1. Complete Your Business Plan

While this may seem like a no-brainer, it’s worth enforcing how important your business plan is. Not only does it allow you to look at the financial commitments of your startup, but it also serves as a guide as to how your business will operate as a whole.

It will also give any potential lenders or investors an overview of how your business operates, and what methods are used when it comes to acquiring customers. This will ensure you’re portraying a more robust vision of the company and its business goals.

  1. Research the Market

Another point that may seem a little obvious, but it can be easy to assume we have a viable business model simply based on how many businesses are placed within the industry.

However, you should look at what competitor’s solutions are lacking, and what can be brought to the table with the introduction of your business. This could be something as simple as amazing after-sale service, or something as complex as a new piece of software that automates an otherwise time-consuming task.

Knowing what services are already available, as well as ascertaining what customers are looking for puts you in a prime position to meet their needs.

  1. Monitor Your Incomings and Outgoings

Regardless of whether you’re looking for a loan or an investment, you should be in full control of your business expenses. This means looking for cost-effective solutions where possible, and ensuring that these can be paid on time without having a detrimental effect on other aspects of the business.

When operating a startup, the costs involved can be very low if you’re willing to carry out the research. It also ensures that you have to borrow less should any further capital be required, which is more cost-effective.

  1. Protect the Legal Aspects of Your Startup

Depending on the nature of your startup, it will often be the case that some form of legality will be involved. This could be anything from the contract you give to the customer, to the service itself.

Many are able to stay abreast of any legalities simply be following the relevant news platforms. However, if you do find you’re scratching your head in some respects, then you should consider the services of a legal expert.

Granted, it can be costlier upfront, but having a contract not worth the paper it’s written on can be much more detrimental overall.

  1. Keep Up to Date with Paperwork

When running a business, dealing with paperwork can seem like a task that’s of very little importance, but quite often the opposite is true.

Any correspondence sent in relation to your startup should be dealt with in the first instance. It can be too easy to put such task to one side, but if Government bodies such as the HMRC don’t receive paperwork on time, it will often issue fines as a result.

  1. Become Familiar with Your Tax Incentives

Paying tax is part and parcel of operating a business, but that doesn’t mean we should pay more than we have to.

If you have to purchase equipment or stationary for the business, then ensure you keep the receipts. This will reduce your tax liability for the financial year, as you won’t be taxed on income that has been used for the business.

  1. Protect Your Intellectual Property

While many businesses are similar, there will be those that have an idea that can offer something new, but this means it can be open to theft. While falling in line with the legal aspects of your startup, you should look to ensure that your business’s IP is trademarked so you’re not subjected to any inferior imposters looking to cash in on your idea.

  1. Register a Website

Having your idea down on paper is a great idea, but it can mean that it’s inaccessible to some. Having a website allows you to give out an overview of your business with one click. This is an ideal complement to your business plan, and it allows people to really look at what your business is about, and how it presents itself to the business community.

Having a website may be vital for some, especially if they operate a mail-order service. But as many people use Google as their first port-of-call when looking for businesses, a website is an essential starting point.

  1. Only Deal with Reputable Suppliers and Providers

There will be instances when some start-ups have to rely on the services of third-parties. There’s nothing wrong with this, but you do have to ensure that you’re only dealing with providers that are of good repute, or you could find that your startup suffers as a result.

Fortunately, there are many places to turn when it comes to reading reviews. A quick Google search will often bring up a series of reviews left on dedicated review platforms, as well as those listed on social networks such as Facebook and Goole Plus.

  1. Obtain a Business Bank Account

While it may be easy to separate your finances in the early days, as business starts coming in, you may find it confusing having so many entries in one account. Registering for a business account allows you to manage your finances with more clarity.

As well as allowing you to assess profit more clearly, it also prepares you for prompt returns in relation to any Corporation Tax or VAT payments.

There may be some elements here that are irrelevant to your particular business model, but it does show how much there is to factor in when running a startup, and just how useful a checklist can be.

10 Financial Tips For New Start-up Businesses

10 Financial Tips For New Start-up Businesses

10 Financial Tips For New Start-up Businesses

Starting up a new business is a time of mixed emotions you’ll be nervous, excited, proud and confident. However, that last one might not last very long if you don’t get a solid foundation set up, the risk of bankruptcy is incredibly high in your first few years and no entrepreneur wants to experience that. 

According to research from Bloomberg, 8 out of 10 start-up businesses will fail in the first 18 months of their operation. So, the risk of failure and bankruptcy is high but don’t panic because you can improve your chances by following these 10 fantastic financial tips.

Budget Everything

One of the biggest reasons start-ups fail and go bankrupt is because they don’t budget properly, if you want your business to succeed then you need to keep on top of your cash flow. You need to know exactly how much is coming in and how much is going out and what it’s being spent on. Every area should have a budget and you should always stick to it, great ideas don’t pay the bills so makes sure you keep on top of your money.

Avoid Unneeded Expenses

When you start a business, you’ll need to spend money that’s just part of getting your business up and running. But you need to make sure you’re spending that money on the right things you don’t need a huge office with an amazing view when you’re just starting out do you? Or fancy coffee machines for the staff room, remember to focus your money on what matters not on extravagant fixtures.

Have A Business Plan Ready

It surprising how many entrepreneurs start setting up a business without a plan, you should always make time to set-up a business plan first. With this you can better work out exactly what you want your business to do and better evaluate your ideas, it also gives you a way to track your goals and work out all the costs involved. So, before you do anything else get yourself a business plan drawn up.   

Check Out The Competition

Yes, it might seem sneaky but this is business we’re talking about everyone does it! So, don’t be afraid to check out your competition and see what they’re doing remember your business is trying to outdo them so look at what they’re doing and see how you can improve on it.

Get Ready To Promote Your Business

Despite what Hollywood might show us not all entrepreneurs are confident, extroverts with a talent for showmanship. That’s OK but no matter how much you hate it you’re going to have to tackle that problem a get ready to promote your business yourself at least for a while. PR firms are not an expense most start-ups can afford so you’ll be doing the promoting on your own.

Use Social Media

Social media is an amazing tool for all kinds of purposes especially promotion, but it can also be used for marketing research and much more. So, get your business on social media as quickly as possible and remember to try and update regularly.

Research Your Customers

Just like researching your competition getting to know your customers will help your start-up business gain a huge advantage. You need to know how to attract customers from your key demographics and understand how they operate. You should be researching your customers all the time, while your business is still in development and after it’s been set-up.

Know What You’re Getting Into

Setting up a business is hard, now you might be thinking “tell me something I don’t know” but few entrepreneurs will be ready for what exactly that means. It will likely mean many late nights and long working days, so say goodbye to your social life for a while because you’ll be putting all your focus and effort into running your business.

Start Out Slow

If you’re setting-up a business you don’t have just jump in, you can start out slowly in fact till you’re ready you should take it slow. You don’t have to quit your job straight away after all, while you’re getting your research done and setting up your business plan you can keep working. Many start-up businesses fail because entrepreneurs try to rush things leading to higher costs and big mistakes when it comes to starting a business slow and steady does win the race.

Don’t Micro Manage

In the early days of your business, you’ll likely be doing many different jobs, that’s why being a jack of all trades will give you a great advantage. However, when you have the time and money to hire employees you’ll have to learn to let them do their own thing. Micro managing will take up too much or your time and won’t create a good working environment. It will be difficult for entrepreneurs to take a back step but if you want your business to succeed then you’ll need to learn to do it.